SET forecasted to dip amid US bond yield uncertainty

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The Stock Exchange of Thailand (SET) index, which dipped below 1,400 points last Friday, is anticipated to continue its downward trajectory this week, potentially hitting 1,330 to 1,350 points, as per market analysts’ predictions. Factors contributing to this trend include fluctuating US bond yields and uncertainties in global factors.

Wikij Tirawannarat, a senior executive at Bualuang Securities, pointed out that the exchange was burdened last week due to the unstable nature of US bond yields. This situation is set to persist this week.

“If bond yields persist in their rise, the impact will be felt on inflation and consequently on the interest rate.”

Wikij added that the SET’s vulnerability may lead to an index of around 1,330 to 1,350 points. He recommended that short-term equity investors maintain a cautious approach.

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Meanwhile, Rakpong Chaisuparakul of KGI Securities (Thailand) acknowledged that the recent drop in US Treasury yields had a positive impact on Asian equities. However, he also raised concerns over China’s property market, following the official announcement of a bond default by Country Garden last week.

Rakpong further highlighted the uncertain status of the Thai economic stimulus following another delay in the government’s decision on the funding plan for the 560-billion-baht digital wallet stimulus, reported Bangkok Post.

Experts from Asia Plus Securities (ASPS) have identified several factors to monitor, including the war between Israel and Hamas, fluctuations in US bond yields, the digital wallet scheme in Thailand, and the proposed land bridge.

According to a research note from ASPS on Tuesday, the ambiguity surrounding global factors like the Mideast War and US interest rates has resulted in a slower fund flow in stocks.

“The continued outflow of funds from risk assets might lead to a further weakening of the baht, thereby slowing inflows into Thai stock markets.”

Despite these pressures, the SET index’s valuation seems favourable regarding price-to-earnings ratios and earnings-per-share growth, suggesting promising signs for medium- and long-term investment, the brokerage concluded.

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Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.

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